$ide Effects: Insider blames middlemen for high drug costs

This isn’t the retirement Janet and Kyle Snyder envisioned for themselves.

Those pricey vacation jaunts have been replaced by pricey trips to the corner drug store and part-time jobs needed to cover $400 a month for their prescription drugs.

“It’s just changed our perspective on how our retirement would be,” Janet Snyder said from her Elyria home.

“Things we thought we’d be able to do, we had to reconsider. That’s what we weren’t prepared for: the rising costs of our prescriptions.”

Prescription drug prices are affecting millions of Americans.

A WKYC Channel 3 News/TEGNA exclusive investigation found more than 100 drugs that have risen in cost by at least 50% or more.

For example, acne medication tetracycline was once 10 cents a pill. Drug makers now charge $10 a pill.

Why?

“They will price things to make money and they will gouge because they can,” a pharmacist said.

The WKYC Channel 3 News investigation also found millions of dollars being funneled from drug and health care companies into the campaigns of Congress and little regulation over the pricing practices of pharmacy benefit managers, whom many – including a pharmacy insider – blame for the rising costs.

“It’s really hard to have faith in Washington when you think that drugs companies have them in their back pocket in order to get them to vote the way they want them to vote,” Snyder said.

DRUG PRICES SOARING

Rosie Harris is a cancer survivor. Today, she’s trying to survive the cost of her medications.

She says the cancer-fighting drug exemestane jumped dramatically in price and is now costing her more than $650 out of pocket for a 90-day supply.

“I told my doctor I can't afford the drug," Harris said. “In this country, we're supposed to be the best there is, and yet, people like myself are unable to get the medications they actually need to stay well.”

Mark Burless knows first-hand how high drug prices may alter a patient’s lifestyle and well-being.

He has Crohn’s Disease and has undergone eight surgical procedures. He was prescribed Remicade.

His copay: $460 a month.

“I can no longer afford it,” he said.

Burless has since stopped taking the medication.

“I suffer,” he said.

Burless is like many patients.

As a result of higher drug costs, some patients ration their meds or stop taking them all together.

Doctors say it’s become a crisis that affects the health of millions of people.

At the same time, the public is demanding action from Congress.

However, the same WKYC Channel 3 News/TEGNA investigation found that pharmaceutical and health care companies - along with Washington lobbyists - are throwing tens of millions of dollars at U.S. legislators. Insiders say drug pricing is a complicated, often covert equation.

As far as pricing goes, it’s an unregulated industry - drug makers can charge whatever they want and many do. But it’s the pharmacy benefit management companies (PBMs) that are drawing the latest criticism, and federal scrutiny.

“PBMs are gouging the public because they can,” said one local pharmacist, who spoke on the condition of anonymity for fear of retaliation by the PBMs.

“They’re able to charge whatever they choose to charge,” she said. “One word to that: gouging.”

WHERE IS CONGRESS?

In the past year, Congress has grilled the makers of EpiPen, a life-saving injection drug that has risen in price over 400%. Congress members also questioned Martin Shkreli, whose company Turing Pharmaceuticals purchased Daraprim and promptly raised the price from $13 a pill to $750 per pill.

Shkreli’s smirk while being questioned by a Congressional committee was shared and ridiculed repeatedly over social media.

The price was eventually lowered, but not before Americans saw first-hand how greed plays a role in their medical care.

“Everyone one of those players in the middle are incentivized to have drug prices higher,” said Antonio Ciaccia, a spokesman for the Ohio Pharmacists Association.

A WKYC Channel 3 News review of Congressional records show our local legislators have accepted hundreds of thousands of dollars from drug and health care companies.

And often times, the review found, the legislators given the most money have voted with the industry. Sen.

Rob Portman, who easily won re-election this month, has accepted more than $750,000 in contributions since joining the Senate six years ago. A watchdog group gave him unfavorable marks in all three of his votes on health care.

Channel 3 News tried to interview the Republican senator about prescription drug prices, but his staff limited a producer to a single question. Portman said he had no idea why pharmaceutical companies are so generous to his campaign.

“That’s not how I operate. How I operate is I come up with my policy proposals, including taking on this prescription drug issue,” Portman said. “I know they support Democrats. They support Republicans…But I do what’s right for the people of Ohio.”

Sen. Sherrod Brown, a Democrat, has been given about $500,000 from the industry, but that’s over a 23-year span.

“They spend a lot of money on lobbyists. They spend a lot of money on campaign contributions,” he said. “They too often get their way in Congress.”

John Boehner, the former House speaker and Ohio representative, received over $1 million during his time in Congress.

Little-known GOP Congressman Pat Tiberi, a Mansfield-area Republican, has accepted over $800,000 and favored the industry in 18 of 20 votes.

Rep. Jim Renacci’s record tends to favor the industry. He received a thumbs down on 15 of 16 votes, but he denies doing the drug companies any favors.

He’s taken about $190,000 in donations.

"I support business, basic business principles and I get a lot of support because of that," he said.

Rep. Marcia Fudge, a Democrat, has taken just over $100,000; Rep. Dave Joyce, a Republican, has taken about $118,000.

“The public’s very suspicious of campaign contributions,” said Dr. John Green, a political scientist at the University of Akron.

“They see this as perhaps being the sources of a quid pro quo…and certainly the pharmacy industry is a very major source of campaign finance.”

To Janet Snyder, whose retirement has been upended by the cost of medications, the influence in Washington is obscene.

She questions who her elected officials are representing: citizens or business.

“It’s really hard to have faith in Washington when you think that drug companies have them in their back pocket in order to get them to vote the way they want them to vote,” she said.

“They’re supposed to be there helping us. But it’s hurting us, the people the people that you asked to vote you in.”

SO WHO’S TO BLAME?

Behind the scenes, pharmacists complain of the drug pricing power given to PBMs. These companies – such as CVS Health, Express Scripts or Optum Rx – are among America’s most successful enterprises, each earning a spot in the top 25 of Fortune 500 companies.

Most people who have purchased health care are also assigned a company to handle their prescriptions.

That’s the job of PBMs.

They work with health insurers and negotiate prices with drug companies. They also set up formularies that places drugs in certain price categories.

“The PBM is the last Wild West in health care,” Ciaccia said.

It is the PBM that tells the pharmacist how much to charge a patient. Manufacturers offer rebates to the PBMs that critics say ultimately raise prices.

PBMs often demand money back from pharmacies in the form of a “clawback.”

On occasion, pharmacists say they lose money filling a prescription based on prices set by the PBM.

At the same time, PBMs contract with pharmacies, banning them from speaking publicly about pricing. PBMs have been accused of pocketing profits at the expense of the public.

“I think if a lay person were to see how the drugs are priced, what might impact the prices, they would have pitchforks and axes in their hands,” said Ciaccia. “Ultimately, you have a system that is set up so that when drug prices go up, every single one of those middlemen can benefit from that.”

Pharmacists across the country have been critical of PBMs and their influence.

Some complain that patients are never told that they could save money by paying cash rather than having the medicine run through their insurance.

“If there wasn’t that middleman, we wouldn’t have these high prices,” a pharmacist said. “It’s going to drive pharmacies out of business.

I don’t see any other motivation than greed. They have just grown into a very aggressive and frightening industry.”

The U.S. attorney’s offices have subpoenaed records recently from Express Scripts. The investigations are focusing on the PBMs relationship with drug makers.

“Given the ongoing focus on drug pricing, it is no surprise that the pharmaceutical industry, and by extension our industry, will receive inquiries like these,” an Express Scripts spokesman said in a statement released to St. Louis reporters.